FE Editorial : Facts on the ground

With the focus of action over the next few weeks on whether the government is able to get Parliament to approve a hike in FDI limits to 49% in insurance and pension sectors, it seems reasonable to believe FII flows will continue to remain strong, lending support to the rupee as well as the Sensex. What is disconcerting, however, is that the government continues to dilly-dally over tough decisions like hiking of fertiliser prices and, more importantly, the setting up of the National Investment Board (NIB) which is critical if R1,80,000 crore of stalled projects are to be kickstarted. Not only do state governments need to be made part of the NIB process since a large number of clearances are stuck in the states, the status of the NIB needs to be clarified. While environment minister Jayanthi Natarajan was quick to send off a letter to the Prime Minister within days of the finance minister’s proposal—to say the NIB went against the scheme of things whereby her ministry was responsible to Parliament for the protection of the environment—news emanating from the government suggested the kinks had been worked out and the NIB was soon going to be a reality. While the rules of business were to be changed to move the authorisation process from the line ministry, say environment, to the NIB, the actual clearance was always expected to be a tricky process. In the case of Posco, for instance, the environment ministry

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